February 01, 2016

Rabbis, Rebbes, Kabbalists And Wonder-Workers Will Now Have To Pay Taxes

“It’s a pity it took so long for the legal authorities to recognize that blessings, holy water or charms are a product like any other product or service, and the money that’s gotten for them – even if it’s given officially as a ‘contribution’ – should be liable for tax, like any other income.”

Rabbis, Rebbes, Kabbalists And Wonder-Workers Will Now Have To Pay TaxesShmarya Rosenberg • FailedMessiah.com

Blessings given, amulets written or segulas devised in return for a fee, along with income from selling vials of purported holy water, teaching wedding prep classes and Torah lessons, and income from doing circumcisions, are now all taxable. Providers will be required to pay taxes on that income and a Value Added Tax will also be in place for consumers of these religious products and services.

Israel’s Tax Authority spelled out the details in a document sent two weeks ago to government tax inspectors.

If the taxes are really collected, it could reportedly generate hundreds of millions of shekels in revenue annually for the government.

“It’s a pity it took so long for the legal authorities to recognize that blessings, holy water or charms are a product like any other product or service, and the money that’s gotten for them – even if it’s given officially as a ‘contribution’ – should be liable for tax, like any other income,” Reform Rabbi Uri Regev, an attorney who heads the religious freedom advocacy organization Hiddush, told Ha’aretz

State Comptroller Joseph Shapira published a a report in October 2014 that claimed to show that the Tax Authority was systematically failing to enforce existing tax law for rabbis, kabbalists and others providing religious services. The report said the Tax Authority had proof of extensive money laundering by 11 rabbi-kabbalists and six haredi beit dins (religious courts) but failed to act to enforce the law against them.

“Most of these huge funds, accumulated by a few dozen kabbalist rabbis, are no secret. The Tax Authority has not determined clear policies yet with regard to these rabbis and the taxation of their revenues. It has not initiated a clarification of their legal status, even though the need to regulate such revenues arose 15 years ago [in 1999],” Shapira wrote.

It took the Tax Authority eight months after Shapira’s report was released to issue a draft notice to regional Tax Authority offices outlining how taxes should be assessed and collected in these cases.

It took another seven months, until January 19, 2016, for the Tax Authority to issue a memo to all its regional offices detailing exactly what is taxable income and how those taxes should be assessed and collected.

From now on – provided the Tax Authority actually does what it says it will do – the rabbis will be taxed for all cash payments and for gifts in kind (for example, overseas travel paid for by a third party). Gifts and donations to the rabbis will also be taxable if they were given in exchange for an identifiable religious service like a blessing or performing a circumcision or acting as a sandak at one.

If a rabbi’s religious nonprofit is “aided by a large organizational operation, including workers and aides, and provides religious services in an organized and systematic way,” its income is taxable, the new Tax Authority memo reportedly says.

“Many religious service providers have a reputation for expertise or specialization for the services they provide,” the document continues. “In fact, they are often believed to have special qualities that attract the wider public to them to receive their services.” If this is the case, these rabbis, kabbalists, mohels, etc., should be taxed like any other business, the Tax Authority memo says.

Similarly, if a nonprofit gives a kabbalist or rabbi use of home to live in, the value of that gift would be taxable income according to the Tax Authority.

Kabbalists and some hasidic rebbes and so-called wonder-workers often charge desperate Jews hundreds, even thousands and tens of thousands, of dollars for blessings, amulets or custom-issued “segulot” they believe will spiritually fix something that is causing pain or concern. For example, a follower has a daughter who is in her mid-20s but is not yet married. A kabbalist’s or rebbe’s blessing, amulet or segulah would “fix” or “remove” the spiritual impediment blocking the engagement and marriage of that child. Or a person may be ill with a serious disease, in which case the blessing, amulet or segulah would “repair” the spiritual breach that allowed the illness to take hold.

Whether some or most of the rebbes, rabbis and kabbalists really believe these blessings, amulets or segulahs work wonders is unclear, although many observers believe most do not. But the followers who pay for these blessings, amulets or segulahs do believe they are receiving a tangible service from a “holy man” that will heal or repair what is ill or broken.

Comments

Rabbis, Rebbes, Kabbalists And Wonder-Workers Will Now Have To Pay Taxes

“It’s a pity it took so long for the legal authorities to recognize that blessings, holy water or charms are a product like any other product or service, and the money that’s gotten for them – even if it’s given officially as a ‘contribution’ – should be liable for tax, like any other income.”

Failed messiah was established and run in 2004 by Mr. Shmarya (Scott)Rosenberg. The site was acquired by Diversified Holdings, Feb 2016. .We thank Mr. Rosenberg for his efforts on behalf of the Jewish Community.

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